DanaB27
Expert Alumni

Retirement tax questions

Usually, the plan administrator has time until April 15th to make corrective distributions.

 

If you withdraw it in time you will not have to add the excess to your 2021 wages since it was after-tax money. The earnings will have to be included on your 2022 return.

 

2022 Forms 1099-R will be issued reporting the excess:

  • Form 1099-R with code P in box 7 can be ignored if you withdraw it before or on April 15, 2022, since you don’t add this amount to your wages.
  • The earnings on Form 1099-R with Code 8 in box 7 should be reported in 2022.

 

Please see Pub 525 for additional information.

 

[Edited 3/28/2022 | 3:30pm PST]

@Sam726 

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